Nikkei seen treading in range, mood still downbeat

路透新闻部

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TOKYO, May 29 (Reuters) - Japan's Nikkei share average is
likely to tread in a range on Tuesday, as investors eye a
worsening euro zone crisis and a fall in European stocks on a
plan by Spain to bail out a troubled bank with sovereign debt.
Market players said the Nikkei was likely to trade
between 8,500 and 8,650 on Tuesday. There were no Nikkei futures
traded in Chicago on Monday as U.S. markets were closed
for Memorial Day.
"There were few new developments overnight to spur investors
to move their positions today, so it's mainly about watching to
see if battered blue-chips like Sony stop falling," said
Masayuki Doshida, senior market analyst at Rakuten Securities.
Sony Corp has fallen 20 percent so far in May,
failing to convince investors about its strategy to turn around
its loss-making TV business.
European shares ended down overnight, with the biggest fall
in Spain's IBEX as concerns about the health of Spanish
banks deepened. A Spanish government source said the country may
use sovereign debt to recapitalise Bankia, which asked
for rescue funding last week.
Fears that a June 17 Greek election could result in a
rejection of its EU bailout and the country's exit from the
eurozone were partly soothed by a weekend poll suggesting
pro-bailout parties may gain enough support to form a coalition.
The Nikkei inched up 0.2 percent to 8,593.15 on Monday,
propped up by gains of Fanuc Ltd and Fast Retailing
, while the broader Topix lost 0.1 percent to
721.11.
"A lot of companies in the first section of the Tokyo Stock
Exchange fell yesterday, as did the Topix, showing a general
lack of confidence," said Doshida, referring to the section that
lists major companies.
The Nikkei capped its eighth week of losses last week, its
worst run in 20 years, after concerns about the ongoing euro
zone crisis, slowing global recovery and a persistently strong
yen countered a largely positive earnings season. The benchmark
index has fallen 16.2 percent from its year high of 10,255.15 on
March 27.
> European shares knocked by Spain bank worries
> Euro helped by Greek polls but still vulnerable
> Prices rise as Europe fears promote safety bid
> Gold prices pare gains as euro slips lower
> Brent crude oil closes above $107 on Greece, Iran
STOCKS TO WATCH
- MARUBENI CORP
Marubeni Corp, a Japanese trading house, is near to
clinching a deal to buy U.S. grains merchant Gavilon for more
than $5 billion including debt, and could announce the purchase
as early as Tuesday, sources said.
-KANAMOTO CO LTD
Construction machinery company Kanamoto Co Ltd said on
Monday that its operating profit was likely to jump 62 percent
to 4.7 billion yen in the current financial year compared to the
previous year, with sales seen increasing 7 percent due to the
post-tsunami reconstruction effort.
-PANASONIC CORP
Panasonic Corp is planning to cut 3,000-4,000 staff of the
7,000 that work at its headquarters, through early retirement
and transfers to subsidiaries, the Nikkei business daily
reported on Monday. The company has a total domestic workforce
of around 100,000